Frequently Asked Questions
Why should I invest with Fulcrum?
To determine this, we first recommend a brief conversation where we can assess and identify your investment objectives and ensure compatibility with our approach and philosophy. We have a very conservative approach to investing with a focus on the safety and viability of the investment through location and market studies, risk mitigation, due diligence, conservative underwriting, and a pursuit of operational optimization.
Who is able to invest with Fulcrum?
Our investments are open to accredited investors and sometimes sophisticated investors. Additionally, it is important that we ensure alignment in each of our expectations to ensure a prosperous and ongoing relationship. We accomplish this through an upfront conversation where we assess your investment objectives, answer questions, and decide whether we will be a good fit.
Am I an accredited investor?
An accredited investor, in the context of a natural person, includes anyone who:
earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
any entity in which all of the equity owners are accredited investors.
Am I a sophisticated investor?
A sophisticated investor means the person must have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
What type of funds can I use to invest with Fulcrum?
Typical investment accounts are as individuals, joint accounts, tenancy in common, entity accounts (Trusts, Limited Liability Companies, Limited Partnerships, C Corporations, S Corporations), individual retirement accounts, and 1031 exchanges. However, please note that some investment opportunities are not suitable for 1031 exchanges.
Can I invest through my IRA?
Yes, you can invest through your IRA. If you currently have a self-directed IRA, please check with your current custodian to ensure that they will allow you to place your investment with Fulcrum Capital Partners. If you haven’t converted from a traditional IRA to a self-directed IRA you’ll need to contact a custodian to help you with that. If you need a referral, we can connect you with the group we use personally.
How can I invest with Fulcrum?
After a brief conversation to assess and identify your investment objectives and ensure an alignment of expectations, investing with Fulcrum is a simple process and includes registering for the investment, reviewing and completing the investment paperwork, and funding of your desired investment amount through your investor portal.
What are the tax advantages of investing in real estate?
One of the advantages of investing in a fund or syndication over a REIT is the unique tax advantages offered in this type of investment. These tax advantages include tax-deferred quarterly distributions, no immediate tax obligation for proceeds from capital events such as refinancing, capital gains tax-deferred 1031 exchanges, and a step-up in basis benefit which reduces tax obligations of your heirs upon sale of the inherited asset.
How frequently are distributions made?
As available, distributions are made quarterly and are direct-deposited into the account of your choice and are accompanied by detailed reporting.
What exactly are investor funds used for?
Investor funds are coupled with financing and utilized toward the acquisition of properties which includes items such as down payments, acquisition fees, legal and transaction costs, capital improvements, and reserves.
What is your experience?
Justin Recca and Eric Fiedler, the principals of Fulcrum Capital Partners, have a combined 26 years of experience in real estate with extensive experience in deal sourcing, financial analysis, acquisitions, and asset management. They have acquired over 139 residential units and served as the property managers for over 700 residential units. Additionally, they have underwritten more than $200 million of residential real estate deals.
In what locations do you invest?
We invest in Central Florida, but mostly the greater Orlando area.
Is this a REIT?
No, a Real Estate investment Trust (REIT) is more similar to a stock and thus is correlated with the stock market and its volatility. Investment with Fulcrum has a few advantages such as tax advantages not available to investors in a REIT as well as the ability for investors to choose which projects or funds they want to participate in. Generally investors have no decision making when it comes to which projects the REIT invests in.
What documents are necessary for me to invest with Fulcrum?
The process begins with the investment summary which outlines the specifics of the project and offers potential investors the ability to assess the investment and decide whether it is of interest. From there, the investor indicates their desired level of investment, reviews the legal documents including the private placement memorandum (PPM) and subscription agreement, executes the subscription documents, and wires funds. From there, we deploy the funds into suitable properties, manage the day-to-day operations of the fund and various projects, provide quarterly updates, distributions, and an annual executive summary of the performance of the fund along with Schedule K-1s and an overview of our goals for the coming year.
What is a K-1?
The Schedule K-1 is an Internal Revenue Service (IRS) tax form issued annually for an investment in partnership interests. The purpose of the Schedule K-1 is to report each partner's share of the partnership's earnings, losses, deductions, and credits. The K-1 is provided to investors on an annual basis such that each investor can include the K-1 with their tax return.
Is this sort of investment legal?
Yes, our offerings are organized under SEC Regulation D.